Are gas prices about to take off?

Prices at the pump have been dropping for months. Industry analysts are trying to gauge future movement, but say the 'fiscal cliff' could be a determining factor.

By Bruce Kennedy Dec 28, 2012 2:42PM

Image: Gas prices (Photodisc/SuperStock)Has the easing of prices at the pump been a final holiday present for consumers, or just part of the annual cycle of supply and demand?


Gas prices have been dropping for months. Several cities even reported unleaded gas dipping below $3 per gallon over the holidays, but in recent days the price of gas has been creeping up. The national average for a gallon of unleaded was $3.28 Friday, up from $3.26 Thursday and $3.23 a week ago, according to AAA.


AAA singles out several factors for the decrease in prices this fall and winter: larger gas inventories, lower crude oil prices, less demand for gas during the winter months as well as a switchover to less-expensive winter blends of gasoline. The ongoing economic downturn is also having people think twice about how often they find themselves at the pump.


But prices are due to bottom out sooner or later. And now, with crude oil prices firming and continued political and economic uncertainty, the market is apparently at a crossroads.


"Whether gas prices continue to rise or again turn lower will be impacted by action -- or inaction -- in Washington surrounding the looming 'fiscal cliff,'" said AAA’s Avery Ash in the Association's latest Fuel Gauge Report Overview.


"If a deal is reached before the end-of-year deadline it will likely be seen as positive for the U.S. economy, which could send crude prices and gas prices higher. If a deal is not reached, markets are likely to slump and gas prices could go even lower."


But other observers believe the trend is for gas prices to rebound as they usually do in the new year.

"It's happened six out of the last seven years: The national average has risen between Christmas Day and Jan. 15, and this year there's no reason to believe now that this won't happen again," says petroleum analyst Patrick DeHann in his GasBuddy.com blog.


And you can also throw into that mix new projections by the U.S. Energy Information Administration for 2013 and beyond.


The EIA is expecting greater domestic energy production, particularly of crude oil, to continue -- with overall gas consumption to be lower next year. The a.gency says the introduction of stricter fuel economy standards in new vehicles, along with the increased use of natural gas in heavy-duty vehicles, should also have a lasting impact on gas and other energy sources.


These changes, said EIA Administrator Adam Sieminski in a press release, show how "evolving consumer preferences, improved technology, and economic changes are pushing the nation toward more domestic energy production, greater vehicle efficiency, greater use of clean energy and reduced energy imports."


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209Comments
Dec 28, 2012 8:01PM
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don't worry they'll find a way to screw us even if they have to make one up. gas should have been about a dollar cheaper months ago. the oil company's pretty much make the prices whatever they want whenever they want and our government lets them get away with it because the oil company's are big contributors.
Dec 28, 2012 7:58PM
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When crude oil prices rise they raise the price of gasoline at the pump the next day. When they decline the oil company reps tell you it takes 90 days for that to work it's way through the system. It's a total lie and it's price fixing by the few remaining big oil companies. Our polititians do nothing in exchange for large contributions.
Dec 28, 2012 7:56PM
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We have to pay more for gas!  Ya'll be quiet bout tit.  We is gotta pay more.  George, Jr's waws ain't paid off yet and we's gots to pays mo so he kin git his waws paid off.  His ole pappy be in de horspidal now wid a cough.  He done costed us probly millions o bucks fer all dat pettin he be gittin. Anybodi else, they woulda done sent him home and he woulda got bedder or died.  I for one, ain't worried about old man Bush, Sr.  If he lives, he lives.  If he dies, he dies.  If he dies, he will meet God.  Then, God will keep him or send him to the devil.  They all say Mr. Hussein was a bad person.  If so, he and old man Bush may be roommates for eternity!!! LMAO!!!!  When I hear he is no longer costing us tax dollars, I'm gonna go get me a coker-coler and some peanuts!!!  I likes them things!!!
Dec 28, 2012 7:48PM
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In my area, they have risen about 8 cents in the last two or three days.  I think it is government that controls gasoline prices.  I think the bickering in Congress is affecting gas prices.  But, i expected them to rise immediately after the election in November.  I guess that would have been too obvious so I gess they had to keep them down for a while.  I don't understand these things.  If we all would ban together and DEMAND an ouster of Congress, I think we could regain control of our country.  But, we keep going to work and expecting Congress to look out for us. The young and restless don't go to work.  They go to the streets and DEMAND their checks.  They get what they want.  We don't becasue we go to work and keep thinking Congress will look out for us.  Oh, there will be a deal tonight or this weekend!  They, Congress will pound their chests and brag how they saved us.  Of course, with a few tax increases!
Dec 28, 2012 7:42PM
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We have lowwwwwwww gas prices,just check around the world ! Well you must exclude the middle east of course where most countries, around ten of them pay 19 cents to 1 dollar per/gal.
Dec 28, 2012 7:41PM
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Stop talking crazy...big oil already makes billions off of us.

If at all, gas prices can still go down.  Solving the fiscal cliff problem should not have any impact on the cost of gas, although artificially they can try to inflate prices but for that they do not need no ones advice.

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It's our Government when our congressman asked why the oil refinnerie's shut down for maintenance and gas prices were going up with a big surplus, we had a drop in prices. Then they blame the speculators are making the price go up,then the oil companies need money to drill more wells. Well why do they have 5,000 oil wells in the gulf that are capped,we don't need them drilling more wells use the ones already drilled and drop the price. Kill off the speculators, stop re-refinning gas.
Dec 28, 2012 7:30PM
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who cares the oil companies are going to do what they want to do, now they can blame the fiscal cliff.It has nothing to do with the price of gasoline, it is just a convenant excuse.
Dec 28, 2012 6:58PM
Dec 28, 2012 6:54PM
Dec 28, 2012 6:45PM
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Where do you media people buy gas at, prices dropping not on my planet,they have been raised then reduced a few pennies then raised back and are no where near the prices when Bush was the president, the nations debt was half what it is and we all had jobs,house's with a vaule and invest ment accounts.....Thank you Obama and all your ill informed voting tards!

 

Dec 28, 2012 6:44PM
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Gas around my area had been steady  !!! it got down to $3.14 and now it's up to $3.30 in

4 days. This SUCKS !!!!!! I bet were back up to around $4.00 bucks before we know it....

 

 

 

 

 

 

 

North Florida

 

Dec 28, 2012 6:40PM
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the election is over why the surprise
Dec 28, 2012 6:39PM
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The Oil Barons,

Perhaps all consumers of gasoline and petroleum products should be reminded that today's largely unregulated and tacitly corrupt petroleum industry began with one of the biggest professional thieves to ever grace the American landscape, John D Rockefeller. His vast Standard Oil Company of the late 19th century laid the groundwork and the 'rules of the game' from the wellhead and transportation to the refining and retail of oil products on a national scale. With little political or market interference, it is no wonder that he became the world's very first Billionaire in 1892. The oil men who have followed in his footsteps have continued the 'game' to extract obscene profits literally without interrruption or controls for more than a century.... it seems that John D would be very proud indeed of his legacy.

 

Peace to all ~

Dec 28, 2012 6:36PM
Dec 28, 2012 6:25PM
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the gas price and the fiscal cliff should have no reason for gas price to go up. just a big rip off  the oil companys use to get more money. where an oil producing country, our gas prices should be lower
Dec 28, 2012 6:20PM
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With more and more oil being produced here and being poised to out produce opec this makes absolutely no sense.  I'd love to have one of those comfy jobs making all the money at the bottom that is forcing the prices up.  Oh wait that isn't the case exxon mobile has been showing record profits for the last few years, and had 73.3 billion in pre tax net earnings last year.
Dec 28, 2012 6:14PM
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Canada is doubling its production efforts on oil and natural gas so I'm sure obama will be buying from them instead of producing our reserves sorry but tired of being correct the **** has to go back to Chicago where they had over 500 murders this year. And we elect him as president couldn't even do his own state right.AND I'AM SURE WERE ALL CRACKERS TO HIM.
Dec 28, 2012 5:53PM
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OH, NO, HELL, NO !!!!!!! You cannot blame it on supply and demand ..... No way you can make me believe that crap... Makes me wanna go open a can of whoop as the Oil big boys. 
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